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Source: Tianxiachezhisiming

Introduction: After becoming the "new helmsman" of SAIC Group, Wang Xiaoqiu faces the challenges of the new era.

On July 10, SAIC Group announced major personnel adjustments. Chen Hong resigned as chairman of SAIC Group due to retirement, and Wang Xiaoqiu took over. At the same time, Jia Jianxu took over as president of SAIC Group.

I still remember that in 2014, Chen Hong, an "old crew member" on the "giant ship" of SAIC Group, took over the steering wheel from the 63-year-old "helmsman" Hu Maoyuan and drove the giant ship to the deep water area.

In the past 10 years, SAIC Motor has continued to hold the honor of "domestic vehicle sales champion for 18 consecutive years", but the "giant ship" that once made its competitors look up to it has now been surpassed by the "small boat" behind it.

Wang Xiaoqiu took the helm of SAIC, and while accepting the honor, he also shouldered a heavy burden.

Chen Hong: After ten years at the helm, the ship will sink

After 10 years of ups and downs, Chen Hong’s performance cannot be summed up in one sentence. As a "helmsman", determining the direction of the "giant ship" has become the primary goal.

"SAIC will become a world-renowned automobile company with a global layout, multinational operations, core competitiveness and brand influence." Chen Hong vowed at the beginning of the listing.

Chen Hong has pointed out the direction for the future of SAIC Motor and laid the foundation for it. She was the first to propose the "New Four Modernizations" route. Focusing on innovation, she has been involved in hundreds of projects at home and abroad in new energy, new materials, intelligence, and Internet of Vehicles. She also launched Zebra Smart Driving, taking the lead in entering the era of intelligence.

But the development of the times is always surprising. Three or four years ago, with the entry of Tesla into the Chinese auto market, new energy became the main track for domestic auto companies to deploy, domestic cars emerged as a new force, and joint venture cars retreated to the margins. The market once changed its appearance. In the midst of the changing situation, SAIC, the "giant ship", was shaking in the strong wind and lost its direction.

After 10 years at the helm, SAIC Motor of the new era is still regrettable in terms of market value, profit and production and sales scale.

First, the market value was surpassed by others. When the market opened on July 12, SAIC's market value was 163.443 billion yuan, while BYD's market value reached 745.528 billion yuan.

Looking back to 2018, SAIC Group’s market value reached a peak of 439.9 billion yuan, while at that time, BYD’s market value was only 180 billion yuan.

In just 6 years, SAIC Group's market value is less than a quarter of BYD's, and is comparable to the new car-making force Ideal Auto.

More importantly, the cash in SAIC Motors' hands is now depreciating. According to the 2023 annual report, SAIC Motors has a total cash of 191.892 billion yuan, with 143.9 billion yuan in monetary funds alone.

Second, the group's net profit attributable to the parent company hit a 10-year low. The financial report shows that in 2023, SAIC Group's net profit attributable to the parent company was 14.11 billion yuan, a year-on-year decrease of 12.48%, which is equivalent to the net profit of 13.1 billion yuan in 2010.

It is worth noting that SAIC Group's asset impairment is serious. In 2023, SAIC Group's asset impairment (inventory depreciation, fulfillment costs, and shareholder assets) mainly included losses of 4.45 billion yuan and credit impairment of 3.51 billion yuan, totaling 7.96 billion yuan.

Third, sales have fallen sharply. Data shows that in 2023, SAIC Motor's cumulative sales were 5.02 million vehicles, a year-on-year decline of 5.3%. This year, SAIC Motor set a sales target of 6 million vehicles, but actually only achieved 83% of the sales target.

In 2018, SAIC Group reached its peak sales of 7.051 million vehicles. In just five years, SAIC Group's annual sales fell by more than 2 million vehicles, which is close to 13 times the sales of NIO in 2023.

The reason is that the sales of joint ventures have fallen sharply. Data shows that in 2023, the three joint ventures of SAIC Volkswagen, SAIC GM and SAIC-GM-Wuling have contributed a total of 3.619 million vehicles, accounting for 72% of SAIC Group's total sales. However, this year, the sales of these three joint ventures have fallen sharply.

Wang Xiaoqiu: The epic dilemma of the new helmsman

Why Wang Xiaoqiu became Chen Hong's successor.

As an excellent "crew member", Wang Xiaoqiu led the development of SAIC's independent brands.

Wang Xiaoqiu is considered a "veteran" of SAIC Motors. In 2003, when Wang Xiaoqiu was less than 40 years old, he managed SAIC's acquisition of Rover's full range of core technology products and led the launch of the Roewe 550 sedan, which brought the first climax to the development of SAIC's own brands.

Ten years later, Wang Xiaoqiu served as the general manager of SAIC Passenger Vehicle Co., Ltd. concurrently with the president of SAIC Group. After taking office, he proposed a "three 1s" strategy to boost sales, namely the launch of the first Internet SUV Roewe RX5, the launch of the new MG6, and the overseas expansion strategy of SAIC MG brand.

In 2018, the entire automobile market experienced a cold winter, but SAIC's passenger car sales rose against the trend, with annual sales exceeding 700,000 vehicles, a year-on-year increase of more than 30%. Among the top 10 domestic independent brands in sales, SAIC's passenger car sales accounted for more than one-third.

The past highlights always make people sigh, and now what is more important in his eyes is to "survive". After becoming the "new helmsman" of SAIC Group, Wang Xiaoqiu faces the challenges of the new era.

First, to increase overall sales. Data shows that in the first half of this year, SAIC Motor sold 1.82 million vehicles, down 11% year-on-year, with both its joint venture and independent vehicle segments showing signs of decline.

Focusing on sales in June, SAIC-GM sold only 26,000 vehicles, down 72.02% year-on-year. The cumulative sales in the first half of the year were 225,600 vehicles, down 49.98% year-on-year.

The decline has exceeded that of Japanese brands, which are also in a downward trend. In June, Toyota, Honda and Nissan's sales in China fell by 12.9%, 39.0% and 23.6% year-on-year respectively.

For Wang Xiaoqiu, who has just taken office, he needs to carry out in-depth reforms of the joint venture sector, adjust the product structure, and adapt to the new trends of new energy and intelligence.

Second, respond to challenges in overseas markets. SAIC has always been the leader in Chinese auto brands going overseas. Recently, the EU decided to impose tariffs on Chinese auto brands, and SAIC became the main target. SAIC faces a total tax rate of up to 47.6% in the European market, which is a pressure even for Wang Xiaoqiu, who has overseas experience.

In addition, in early June, Turkey announced a 40% tariff increase on Chinese imported vehicles, which further increased the difficulty for Chinese auto brands to expand overseas.

You should know that SAIC Motor's MGG brand is its main force in going overseas. Data shows that in 2023, the MG brand exported a total of 840,000 vehicles, of which a quarter were exported to Europe. According to relevant statistics, for every 10 Chinese cars exported to Europe, 7 are MG brand.

It is conceivable that if overseas market expansion encounters obstacles, SAIC Group's sales pressure throughout the year will escalate again.

Third, promote the development of new energy and the construction of high-end brands. It is understood that SAIC Motor's new energy sector sales target for 2025 is 3.5 million vehicles, but only 460,000 vehicles were achieved in the first half of this year, a large gap.

Currently, many Chinese automobile brands have embarked on the path of brand upgrading by leveraging the new energy track and launching their own high-end products, but SAIC Group's new energy high-end products are not satisfactory.

Looking back at the early days, SAIC Motors was not late in developing high-end brands, from SAIC Roewe MARVEL X, to SAIC R brand, to Feifan Auto, but all failed. Feifan Auto’s presence is getting lower and lower.

However, Zhiji Auto, which SAIC Group has always been optimistic about, has also fallen into a public opinion crisis, with its monthly sales failing to exceed 20,000.

In April, SAIC Zhiji held a launch conference for the L6 new car, but it was collectively criticized for mislabeling the parameters of competitors' products and promoting overtime culture, which once put SAIC Group into a whirlpool of public opinion.

It can be seen that Wang Xiaoqiu has taken on a heavy responsibility, and the market has only three years for the 60-year-old Wang. The career of this "new helmsman" is full of huge challenges. If he succeeds, it will bring a perfect end to his career. If he fails, it will make the SAIC Group, which is in the storm, even more "shaky."